Making the Most of the Diplomatic Opportunity

The Prime Minister’s meetings provided an opportunity for political assurance that India was not only open for business, but ready to listen to Japanese businessmen, facilitate their work and welcome their additional investment.

Prime Minister Narendra Modi’s visit to Tokyo for the Quad Summit shows how effective time management can lead to positive results. The visit was mainly for the Quad summit in person. It was also an opportunity for bilateral meetings with the leaders of the other Quad countries.

This allowed Prime Minister Modi to meet his host, Prime Minister Fumio Kishida, who had visited India in March for the 14th annual India-Japan summit. It was also an opportunity to meet US President Biden in person for the first time since the Ukraine crisis. The two leaders have had virtual conversations a few times.

It was an opportunity for the leaders of the Quad to meet the new Australian Prime Minister Anthony Albanese who had just overthrown Scott Morrison’s party. Morrison was a strong supporter of Quad and AUKUS. One would be appalled to know if the currently ruling Australian Labor Party would continue to follow the same line of thinking. Albanese, in his opening remarks at the Summit, appeased this.

Bilateral meetings are the obvious by-product of a plurilateral meeting like the Quad. During the extra time Prime Minister Modi was in Tokyo on May 23, he used it as if he was on a bilateral visit to Japan. It may be recalled that his last in-person visit to Japan was in October 2018 for the 13th annual summit. Between 2018 and 2022, the annual summits were virtual and PM Modi did not have the opportunity to visit Japan. So, to make up for lost time, it was wisely decided to meet Japanese businessmen and entrepreneurs as well as the Indian diaspora.

During Prime Minister Kishida’s visit to India in March, he announced that the target for Japanese FDI was now 5 trillion yen over the next five years. Essentially, this corresponds on average to an expected FDI of about $2 billion per year from Japan. This is a significant volume and continued reform in India and engagement with Japanese companies will help achieve these goals.

A review of the list of 34 Japanese companies that met with PM Modi shows that many of them are already in India and well established. They are the ones who are now likely to expand their footprint, which will contribute to this larger increase in Japanese FDI. They had better experiences in India. The Prime Minister’s meeting with Suzuki Motor Corporation adviser Osamu Suzuki was revealing. He is the first major investor in India. Now he is quite old and has held a position as an adviser. The fact that he called the PM shows a vote of confidence. Maruti Suzuki is actually one of the biggest expansion investors in India, going beyond automobiles to related sectors including electric vehicles.

The Prime Minister’s meetings provided an opportunity for political assurance that India was not only open for business, but ready to listen to Japanese businessmen, facilitate their work and welcome their additional investment.

The meeting with the diaspora was similar. Since 2018, the Indian diaspora in Tokyo has not had the opportunity to meet the PM. It was important for the Prime Minister to take the time to meet them and tell them about the changes in India and the role he expected of this growing Indian diaspora in Japan. Just like what he said to the Diaspora in Copenhagen, in Tokyo, he expects the Diaspora to contribute to nation building, better understanding of India among host countries and to increase tourism and trade with India.

The Indian diaspora in Japan mainly works for Japanese or international companies. They are integrated into their reception systems and better placed to present the Indian point of view, culturally and economically. It makes a very big difference. Many Japanese companies have adopted the model of American companies by sending their Indian employees living in Japan or even to their overseas offices to guide their operations in India. This is where the Indian diaspora can continue to play a major role.

As for the outlook, the Quad summit followed another shock in the world. The previous Quad summit had taken place following the Covid-19 crisis which was a natural disaster. The Quad is committed to cooperating and assisting partners as well as Indo-Pacific countries in several ways.

This time, the shock of the Ukrainian crisis and the sanctions imposed by the United States and its allies on Russia are the major issues. The global economy had not recovered from the Covid crisis. Now additional shocks are building up there. Although the Quad summit did not lay the blame for it, there was no unanimity on whether Russia was solely responsible for all the ills plaguing the world right now.

According to India, China remains the main threat. The Quad Summit served to refocus attention on the Indo-Pacific and the role of China. India continues to have relentless China to resolve the border issue or reduce force levels even after the deals. The Taiwan issue is now reaching crisis levels; the United States is strongly pushing Japan to do more in an emergency and is examining itself how Taiwan can be protected in the event of Chinese aggression. Japan is facing more frequent incursions by Chinese ships into the Senkaku Islands. Chinese and Russian ships now practice more frequently between Honshu and the island of Hokkaido in Japan. A Chinese aircraft carrier has approached Okinawa and is exercising there. Chinese threats against Japan are increasing.

As for Australia, it would like China to ease the sanctions imposed on it and rationalize its exports to reach pre-Covid levels. It may not happen quickly, but in the meantime, the Solomon Islands, in Australia’s area of ​​influence, have more or less agreed to be a Chinese ally and allow access and Chinese military activity. They also prevent access by others. Other South Pacific countries can be infected in the same way.

Australia must strengthen its influence and act more decisively to persuade its friends in the South Pacific that China is not a trustworthy ally.

So all Quad partners have clear issues with China. While the question is often asked that it is Australia’s new government whose commitment to challenging China may be in doubt, it is often the United States whose intention remains unclear. The United States has deliberately set about portraying Russia as the world’s number one enemy, thereby reducing the focus on China. Their efforts to wean China off Russia include some concessions; the tariff barriers that Trump lifted with China, the Biden administration slowly reinstated. The confrontational position of the United States with China is more circumspect than before. Quad partners will assess whether the Americans can be a trusted ally against China. They seem more interested in defending Taiwan than the Indo-Pacific.

The Americans tried to show they were serious about the Indo-Pacific by announcing the Indo-Pacific Economic Framework (IPEF) consultations, which they called a partnership for prosperity. The United States brought the IPEF to everyone’s attention but left it to Japan. Wisely, instead of rushing an IPEF membership system, and asking countries to join immediately, without being clear on what they were entering, they are now consulting.

What is announced is a framework for discussions and consultations that will follow. For this reason, it has become easier for India to say yes. India has agreed to be consulted, rather than sign up to IPEF, some parts of which certainly make us uncomfortable.

The IPEF, interestingly, is like a big RCEP without China, Cambodia, Laos, and Myanmar, but with the addition of the United States and India. However, it is not a trade pact and does not provide trade access to the US market. It is essentially a TPP-like instrument that attempts to elevate the standards, quality and safety of critical technologies.

Its framework overlaps in some ways with the Quad Preferences, which broadly cover climate, critical technologies, semiconductors, quality infrastructure and Covid management. There are a host of others, including hydrogen for green shipping, cybersecurity, and more. Many of these fundamental ideas can find resonance in IPEF. It remains to be seen how many of these can be worked out and moved to clear commitments.

The writer is a former ambassador to ASEAN. The opinions expressed are personal.

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